Report: Naples' home values will continue to drop (26 percent projection)

— Local Realtors are questioning a national report that predicts home prices will drop nearly 27 percent in the Naples-Marco Island market by June.

A forecast by Fiserv, a financial information firm, shows home values dropping in 342 out of 381 markets around the country, according to a story posted on CNNMoney.com.

The story singles out a few of the markets that are expected to see the largest price declines in the next year, including Naples.

Nationally, the median home price is expected to fall 11.3 percent by June 2010, according to Fiserv’s study.

For the Naples area, the study forecasts a 26.8 percent drop in home prices by summer 2010. Prices are expected to flatten out in 2011, dropping by 0.3 percent.

“I have no idea what they based that on,” said Brad Hunter, a chief economist for MetroStudy, a national housing market research firm. “That’s huge.”

He said the Naples housing market has seen such steep declines that he has a hard time believing prices could drop so much more.

At most, he said, he would expect a 15 percent decline through June. He said the next wave of foreclosures will be at the higher end of the market, resulting in more price adjustments.

Joe Ballarino, president and chief executive of Amerivest Realty in Naples, questions the forecast too.

“They throw out this opinion. But what facts are they using?” he asked.

A spokeswoman for Fiserv could not be reached for this story to comment on the reasons for the expected home price declines here or across the country. According to CNNMoney.com, Fiserv forecasted the price drops over the past few years, but underestimated them.

The Naples Area Board of Realtors tracks home sales and prices in Collier County, excluding Marco Island. There hasn’t been much of a change in the median price in those reports since January, Ballarino said.

In September, the median price — the price at which half the homes sell for more and half for less — was $185,000 in the Naples area. That’s based on resales made through the Sunshine MLS, or multiple listing service.

“I can’t see a $40,000 more drop in median price,” Ballarino said.

The Fiserv report, he said, could scare banks, making them tighten up even more on lending.

“I just saw that (report) and I was angered,” Ballarino said. “It’s ridiculous.”

Brett Brown, president of the Naples Area Board of Realtors, said numbers can easily be skewed.

He doesn’t expect such steep declines and said there are signs of recovery. Sales continue to rise as prices remain relatively stable.

“Finding the bottom is going to be a rear-view event,” Brown said. “No one is going to be able to predict this is the bottom.”

This year, Realtors wrote more contracts in July, August and September than they did in January February and March, which are typically the busiest months, Brown said.

“That is unbelievable,” he said.

Fiserv also forecasts a 20.4 percent decline in home prices in the Cape Coral-Fort Myers market through June 2010. Prices are expected to flatten out in 2011, increasing 0.1 percent, according to the report.

Miami tops the list with a 29.8 percent projected drop in home prices by June. Another 5.5 percent decline is forecast for 2011, which would put the area’s median below $145,000.

Orlando is expected to have the second biggest decline, with prices tumbling 27 percent by next year and another 4.1 percent in 2011.

To see the story on CNNMoney.com go to http://money.cnn.com/2009/10/20/real_estate/home_price_forecast/index.htm?postversion=2009102011.

Connect with Laura Layden at www.naplesnews.com/staff/laura_layden.

© 2009 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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